CAT · 10-Q · 2026Q2 · Full report

Supply Chain Tariff Impact

CATERPILLAR INC · 2026-08-05 · Importance 53 · Surprise 60 · In source text

Caterpillar recorded $392 million of expected IEEPA tariff recoveries in both the three- and six-month periods ended June 30, 2026, reducing cost of goods sold and increasing operating profit. The company incurred approximately $1.0 billion of IEEPA tariff costs during 2025 and before U.S. Customs and Border Protection stopped collecting the tariffs in 2026. Caterpillar expects approximately $600 million of tariff costs in the third quarter of 2026, allocated roughly 50% to Construction Industries and 25% each to Power & Energy and Resource Industries. Excluding expected IEEPA recoveries recorded in the second quarter, the company expects approximately $2.2 billion of tariff costs for full-year 2026.

Key facts

• Excluding expected IEEPA tariff recoveries in Q2 2026, the company now expects 2026 tariff costs of around $2.2 billion; outlook does not include additional IEEPA tariff recoveries in the second half of 2026. source
• Anticipated tariff costs in Q3 2026: around $600 million, similar to Q3 2025; expected allocation ~50% to Construction Industries and ~25% each to Power & Energy and Resource Industries. source
• The company continues to assess additional IEEPA claim submissions; remaining amounts paid under IEEPA were uncertain and were not deemed probable as of June 30, 2026. source
• For the three and six months ended June 30, 2026, the company recorded $392 million of expected IEEPA tariff recoveries for claims submitted and accepted through the CAPE system; these recoveries were recorded in receivables and in Cost of goods sold. source

Impact estimates